WSJ Editor: Those Who Believe Content Should Be Free Are Neanderthals

from the that,-or-people-who-understand-economics dept

Danny Sullivan has an excellent analysis of some of the more ridiculous statements from WSJ managing editor, Robert Thompson, trashing pretty much everything online. Most of Sullivan's analysis focuses on how ridiculous it is for Thompson to claim that Google makes news readers "promiscuous," so I won't address that again (though, you really should read Sullivan's writeup). Instead, I wanted to focus in one little bit that Sullivan mentions, but doesn't explore too much (other than to mention how insulting it is). Thompson declares that there are "three types of people" online, starting with:

There are the net neanderthals who think everything should be free all the time.

Pretty scary that someone who's the managing editor of the most well known and well-respected business newspaper out there thinks this, huh? First off, I don't know anyone who thinks "everything should be free all the time." People are more than willing to pay for scarce goods of value. Where they fundamentally have issues is with being charged for content that can be made free at no additional cost. And that's not "neanderthal" thinking, it's good old classic economics -- the kind we thought the WSJ supported.

And, of course, this also shows Thompson fundamentally not understanding the debate. For many, many years there's been plenty of "free content" in the terms of "free to the consumer" but which is supported in other ways. As Sullivan points out, News Corp., which owns the WSJ, also owns Fox -- which delivers free content, over the air, to consumers, but supported by advertising. Is that a Neanderthal opinion?

It really makes you wonder what they're thinking over at the WSJ or what sort of business smarts they have when they both consider Google to be a problem and think that basic economics on content pricing is "Neanderthal." It should call into question their thinking on other business topics as well. And, remember, this is the same company that is lashing out at "aggregators" like Google News, at the very same time that it's offering its own aggregator as well. If Thompson thinks Google News makes people promiscuous, why does his own site offer something similar?

Ah, another example of colorful language. The director of the Swedish Copyright Association, who is contracted by the government here to do a survey of necessary changes to copyright law, repeatedly used the term Digital Maoists in an article that ended up being referenced in the verdict of the Pirate Bay trial.

But in the case of WSJ one would of course expect more. Using a strawman argument and not even being able to dismiss it with consistent arguments doesn't impress much.

If I had a nickel...

How many times a day do I get in arguments where I have to remind people that *nobody pays for the news ever*. It's as if, now that the internet is here, everyone's brain is broken. Sadly, readers actually do believe that they were funding newspapers all this time by dropping a quarter or two at the newsstand, or a few bucks a month on a subscription.

I've always understood that the main factors limiting newspapers profits were high distribution costs and limited advertising space. Now, thanks to new technology, distribution costs are essentially zero and there is essentially unlimited advertising space, and yet everyone is complaining that the very same technology is somehow destroying the business?

I sort of get a laugh, because any time anyone has the nuts to talk negatively about free, suddenly they are "fundamentally not understanding the debate". Perhaps they aren't cheerleaders for one side, and maybe they have placed the debate in a larger frame?

The current free wave is just that, a wave. Once it is gone, the question is what replaces it?

So weird

Is the newspaper industry feeling so backed into the corner these days that they just have resorted to fight or flight?

I honestly do not see why they have such a big problem with Google. Is it that they just have such a huge misunderstanding of what Google is doing that they think Google is a threat that needs to be eliminated?

It's really hard to follow their rationale on this. It's actually pretty simple: Either enjoy the free advertising that Google gives you and shut up or block them and figure out how to monetize your content on your own.

Re:

One pattern I have noticed with the WSJ is that they are the 'establishment' business newspaper. They are much more consistent in arguing the established business models vs the upstarts (including silicon valley) than they are arguing on economic principal (free markets, etc.).

The only time that you will see them arguing against an establishment BM is when they are supporting a different establishment BM

Pig!

Re:

No, it has nothing to do with whether or not he *has nuts, it is the issue that he *is a whining nutter that MM is writing about.

Take for example Thompsons comment:

If it’s a big news story, if we report a takeover and — we could hold that behind the pay wall, but if we do, BusinessWeek or someone else will simply write a story saying ‘The Wall Street Journal is reporting x,’ and they’ll get all the traffic. Why would we do that?”

By admitting they know how to make money in this environment, he is really just whining about reality here and saying everyone else should think like him which would allow him to over-charge for all his news.

Re:

Why shouldn't we talk about free?
Some of us don't agree with throwing our hard eanred money down a bottomless pit. Especially when the returns on that money is little or nothing. Free has worked since before humanity even had currency and will work well after we are all dead.

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Meat Eaters...

There have been numerous societies in history who've been marked by their advanced philosophical thoughts, peaceful ways and vegetarian-ness.

Without fail; every time some group of mouth-breathing meat-eating violent semi-retarded club-wielding neanderthals comes into contact with one of these peaceful societies, said society ends up dying horrifically.

Pretty hard to line the birdcage with digital content. No added value there. So the next time I need somthing for the birds to crap on, I'll purchace a hard copy of the WSJ, I use it when I run out of T.P. as well..

Re:

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As with most things, it isn't that simple. Distributing content for "free" doesn't necessarily mean that the cost of producing that content isn't ever recouped. Some content may be free to be consumed by Joe Public, but it is likely being paid for by someone. I.E. add supported content. What numb nuts at the WSJ, and many others, seems to assume is that the consumer must be the one to recoup the cost. If that were the case then why does the WSJ even bother selling advertising space? The problem for the WSJ and other publications is that part of their revenue stream is drying up, and they can't think of a good way to replace it. I certainly hope they figure it out, but whining and name calling is not going to help anyone.

Furthermore, there may be people online that truly believe that everything should be free, and the WSJ should try harder to court the people that don't fall in that group while trying to sway the opinions of the "neanderthals".

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The new enemy is fearsome

He is a cleft-headed, monkey-like invertabrate whose only desire is to brutally rape men and women while downloading infringing content and the 'sploding himself, his victim, AND his harddrive in a suicide bombing attack.

He is the Neanderthal Raporist, coming soon to a suburb near you.

How does a Neanderthal Raporist travel into previously innocent towns? On the back of ManBearPig, of course....

Re: Meat Eaters...

What you're paying for...

is delivery. Look at the water bottle industry, imagine paying $2.00 for 16oz. of water. Most people wouldn't do that. However, wrap that water in a plastic bottle and chill it and distribute them everywhere people are likely to be, now people will pay. However, they're paying for convenience , packaging and distribution.

News is like water: it's ubiquitous and the cost is little. The problem is that delivering news on newspaper has a very limited appeal (unlike water). Water requires a manufactured and labor delivered system. News is electronically distributed at almost zero cost. Therefore, asking people to pay for news would be like asking people to pay $2.00 each time they metered 16oz of water into their own container. News isn't made more convenient by printing it on paper: it ages fast and is static.

Forget trying to charge people to re-pay for news that's already been paid for. Forget charging people to re-pay to have news delivered to them that they already paid an ISP to do. You can only charge people for tangible goods. Virtual goods is very hard to sell.

If you think news will disappear when publishers finally get this fact, wrong! The old school publishers will vanish and the new versions will thrive. I've already stopped getting paper media, I've stopped paying for cable entertainment, stopped paying for wired telephone and a litany of other old school communication methods. And when all the papers go away, I will barely notice.

Look who has evolved and who is gonna be extinct.

If he really thinks the world is full of Neanderthals then he will also accept that they are the ones who have not evolved with time. They can choose whatever name they want but they are the dying breed on verge of extinction.

So has he thought of all the options they have got? I can think of two, none of which are really promising for the types of WSJ managing editor or Murdoch.
1. Evolve to compete with the Neanderthals
2. Find a resting place and await your demise.

Competition is good for the market, not businesses

Google's news aggregator causes every paper to compete with each other for every article. If the user goes to a newspaper's home page they may be more likely to look at other stories.

If Google's news site is the consumer's home page, that means a paper's isn't.

Google's algorithm may not be weighted to favor anyone. The major papers don't want their prestige and perceived value replaced with an algorithm that puts them on the same footing as the small market papers.

Google fosters competition and is a catalyst for the winnowing of those who can't compete.

Competition makes businesses leaner and more efficient. The 'fat' that is eliminated doesn't like it.

Competition makes businesses stronger. Stronger means having to work harder and smarter. It makes the best talent more expensive.